Tips for Borrowers When Applying for a Home Loan
• Ask for a Mortgage Loan Disclosure Statement and/or a loan estimate. These documents will tell you the cost and proposed terms of the loan.
• If using the services of a mortgage broker, contact the California Department of Business Oversight at www.dbo.ca.gov or (866) 275-2677, and/or the Department of Real Estate at www.dre.ca.gov or (877) 373-4542 to make sure the mortgage broker is properly licensed.
• Consider asking the mortgage broker for references.
• Check for special programs you may qualify for with Federal, State or local government.
• Do not sign blank forms or forms you do not understand.
• Ask for copies of the forms you complete or sign.
Questions to Ask When Applying for a Home Loan
• Who is the lender?
• What is the interest rate and term of the loan?
• What is the monthly payment for principal and interest?
• How much are the property taxes and insurance?
• What is the annual percentage rate?
• What are points?
• Is a rebate being paid by the lender to the broker?
• When will I receive an estimate of my costs for the loan?
• Is there a prepayment penalty?
• Is there a balloon payment? When is it due and how much is the payment?
• Are there any up-front fees to pay?
• If I have to pay up-front fees, are they refundable?
• How long does loan approval take?
• When will the loan close and how much money must I have at closing?
• If I have a rate locked in, is it in writing?
• What happens if interest rates change during the loan process?
• If the loan does not go through, is there a cancellation charge?
• Is the loan assumable by someone later? Is there a fee?
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DAVID S. FISHER, ESQ.
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